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Does MicroStrategy Incorporated's (NASDAQ:MSTR) CEO Pay Matter?

Simply Wall St

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Michael Saylor has been the CEO of MicroStrategy Incorporated (NASDAQ:MSTR) since 1989. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for MicroStrategy

How Does Michael Saylor's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that MicroStrategy Incorporated has a market cap of US$1.3b, and is paying total annual CEO compensation of US$1.2m. (This is based on the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0. When we examined a selection of companies with market caps ranging from US$1.0b to US$3.2b, we found the median CEO total compensation was US$3.9m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.

You can see, below, how CEO compensation at MicroStrategy has changed over time.

NasdaqGS:MSTR CEO Compensation, July 10th 2019

Is MicroStrategy Incorporated Growing?

On average over the last three years, MicroStrategy Incorporated has shrunk earnings per share by 74% each year (measured with a line of best fit). It saw its revenue drop -2.9% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Shareholders might be interested in this free visualization of analyst forecasts.

Has MicroStrategy Incorporated Been A Good Investment?

With a three year total loss of 32%, MicroStrategy Incorporated would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

It appears that MicroStrategy Incorporated remunerates its CEO below most similar sized companies.

Michael Saylor is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling MicroStrategy (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.